San Antonio’s labor market saw a year-over-year jobs gain of 5.1 percent in the first quarter of 2012. Although regional job growth moderated to a 1.9 percent annual pace in Q2, San Antonio was still well ahead of average. Healthy population annual growth, in the range of two percent, further confirms the relative attractiveness of the region’s labor markets. Development of the Eagle Ford Shale natural gas resource and increased commitments from companies like Boeing will provide a further influx of jobs and activity into the San Antonio economy. As prices for natural gas liquids and crude oil have fallen from first quarter highs, drilling activity in the Eagle Ford region has slowed by approximately 10 percent, according to Baker Hughes. Although the drop in drilling activity has been limited thus far, very low natural gas prices continue to pose a downside risk for San Antonio as drilling programs are reviewed.
Local area personal income growth, which trended 1.3 percent higher than the national average in 2011, grew at a 4.7 percent annualized rate in Q1. Wages for oil and gas extraction workers average roughly 2.5 times the average wage for all employees in San Antonio. Local incomes are expected to grow between 4.5-5.0 percent annually over the next several years, which should provide a significant boost to local spending—good news for housing markets and local businesses.
The San Antonio housing market was insulated from the worst of the recessionary decline in home prices. 2011 home prices were flat from 2010 levels, compared to a 4.3 percent national decline over the same period. Steady population growth and migration to the region have helped keep home inventories low and home prices relatively stable. The region’s recent population influx, driven by the local shale play, has lifted residential construction activity. Home prices are forecast to increase modestly in 2012, by approximately 0.5 percent, before trending higher in 2013-2014.
Click here for the complete 2012Q3 San Antoio Regional Economic Update: SanAntonio2012Q3.